You Can Sleep Inside Marie Antoinette's Corset

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If Paris' rue du Faubourg Saint-Honoré is fashion's epicenter, the Damrak in Amsterdam just might be fashion's anti-matter. This teaming boulevard just off Centraal Station leans more towards tracksuits, takeaway frites, and Hooters-like establishments called "Teasers" than couture and Veuve Clicquot. Smack in the middle of this merry maelstrom of stoned Brits, however, is a new, surprisingly elegant establishment: The Exchange Hotel.

A rare boutique experience that both elevates and embraces the energy of its surroundings, this is no generic techno-thumping W clone or wincingly hip Thompson affair. Instead, The Exchange represents the brighter side of this picturesque port city's paradoxical street style—at once severe and jubilant, functional yet avant-garde, and still totally ego-free.

To achieve this, the hotel proprietors partnered with AMFI (Amsterdam Fashion Institute), commissioning eight student designers to conceive 43 rooms, transforming a 17th century apartment building into a percolator for emerging Dutch design. As one could imagine, the rooms vary wildly, from `80s rainbow brights to soft sculptural t-shirt folds, giving the hotel a loose, improvisational quality like a fashion sketchbook come to life.

The "Epaulettes" room is a softer take on military decoration featuring hand-braided pale blue trimmings, while "Crinoline Cage" invites you to spend the night inside a 19th century antique lace and linen gown. "Growing Creature" is decked out in paper flowers recalling a DIY prom dress. "Urban Crafts" riffs on Stephen Sprouse's seminal graffiti tagging for LV, while "ManRay's Eyes" takes the surrealist artist's iconic imagery to new decorative heights and "Marie Antoinette" lets you sleep inside the embellished corset of this fondant-obsessed teen Queen.

In the words of owner/proprietor Suzanne Oxenaar (whom, along with Otto Nan, is also the creative force behind the famed Lloyd Hotel and the Llove Hotel in Tokyo), "It is hard to pick out a favorite room. Each room to me represents an indistinguishable part of a larger whole, but I can say our challenge to the students was to treat each room like a `fashion model,' not as an interior design project. Everything you see inside the room is an accessory."

Throughout the spacious, maze-like interior, locally crafted Mosa tiling features three shades of glazing, with matte and shine meant to evoke human skin. Glass facades emphasize transparency, communicating freely with the street and hinting at Amsterdam's voyeuristic side: you can watch guests check in from an upstairs walkway, or gaze down at patrons dining in the hotel restaurant from upper staircases, and many rooms look down upon the bustling pedestrian walkway of the Damrak, known, tongue mildly in cheek, as "The Red Carpet."

At the hotel opening party last Friday thousands of guests mingled without a VIP room or iPad gatekeepers squeezed into their Jimmy Choos—the crowd simply walked in, including the former mayor of Amsterdam who arrived by bicycle. Every guest wore a giddy grin and amazing shoes. Flocks of girls stood in casual groups, slim as cigarettes, all wearing tailored dresses with intricate felt appliques, talking animatedly over small glasses of beer.

Then it was time for the unveiling: 600 meters of red silk nylon draped down the buildings façade was attached to the train of a red dress worn by Liesbeth in't Hout, AMFI's former director. For the big reveal she walked out from the hotel's restaurant, Stock, and strode forward across the street, seemingly pulling this immense velvety wall of fabric behind her. When asked about this impressive visual statement, the buoyant visionary Suzanne is typically modest. "We were just glad to find someone to wear the bloody dress," she says. "Can I offer you some cake?"